Payment cuts would hurt rural areas

Andrew Bell Farm Press Editorial Staff | Mar 04, 2005

Delta farmers want legislators to understand that substantial cuts in farm subsidies would adversely affect more people than simply farmers.

Recently, the White House — in seeking ways to cut the deficit by tightening government spending — outlined a budgetary plan that would trim the payment limit cap for individuals from $350,000 to $250,000 for commodity payments.

John Alter, president of the Arkansas Rice Growers Association, said drastic cuts could “ruin the rice country” in that state.

“That should hurt the economy in every rural Arkansas town, down to the mom-and-pop store on Main Street,” Alter said.

Cutting farmers' subsidies would translate to reduced profits for all businesses that directly or indirectly depend on farming, he insisted.

“How many jobs does the larger farmer generate?” he asked. “How many tons of fertilizer does the farmer purchase from the local fertilizer dealer? How many hours of flying time does he spend with the local duster?

“How many tractors does he use, and how many service mechanics keep them up and running?”

Chip Morgan, president of the Delta Council, said there are currently about 60,000 ag-related employees in the Mississippi Delta. While acknowledging other kinds of manufacturing jobs, it is the farm industry that sets the tone for a community's economy, he observed.

“While we are grateful for those (manufacturing) industries, their disposable income is mostly in other cities,” Morgan said. “The real issues are with the farmers, who spread their wealth within a 30-mile radius of the farm gate. So, it's the local economy that absorbs what the farmer gets or does not get.”

Another sector of the ag industry to watch closely if farm cuts are made, he warned, are farm properties, which affect banking operations commonly found in rural communities. He recalled frequent shifting of land transactions during 2002 because of a depreciated farmland values.

Allen Helms, vice chairman of the National Cotton Council, was not surprised that agriculture was included in a sweeping line of potential domestic subsidy reductions.

But he was taken aback, he said, by what he called sizable cuts in agriculture. “This could hurt the safety net of all American agriculture,” he said. “It would mean a trickle-down effect on the economy overall.

“America has had an abundance of food and fiber at reasonable prices, and that could be hard to maintain with severe cuts.”

Charlie Noble, a cotton and corn farmer for more than 30 years in Rayville, La., said serious payment cuts could likely have two results: one immediate and the other long range.

“In the short term it could affect the level of production, and in the long term it could restrict the ability to invest and create a lack of confidence in farming,” Noble said.

Much worse, it could eventually cause the United States to become more dependent on foreign countries for food goods, he added.

Noble said for cotton growers, the past two growing seasons were particularly productive, and therefore enabled them to be competitive on a global economic sale.

“But there is no guarantee that that will happen again in the future,” he said. “We mainly struggle with the program as it is, so to reduce benefits any more could put farmers in a bad fix.”

Noble said he and other farmers are disappointed in the president's proposal because they believed they formed an agreement of understanding — albeit not a contract — in 2002 with the government that the program would be left alone through 2007.

“You have farmers who have already made operational plans, made land investments and are under contracts based on the farming subsidy program as it is,” he said. “I feel like this is a breach of confidence for the government to go back on its word.”

Some criticism facing the subsidy program has circled around the fact that there are now fewer farmers with larger operations as a result of subsidies.

“For a farmer to be punished because he crossed an imaginary line is ridiculous,” he said. “It's also a line that is arbitrary. How much is too much? Some farmers are bigger than others, but that criticism is the old, classic envy approach that separates the rich and the less wealthy.”

Alter noted that agriculture has become a “handy place” for the federal government to find more money, and one reason is because there are fewer congressional representatives looking out for farmers.

“More and more people now live in the cities,” he said.

But that is partly why farmers, he said, were hopeful that the program would be left alone through 2007.

“By that time, most felt like the volatile markets would be more sound and down the road the markets would be improved enough that there would be less of a need for government assistance.”

Morgan said that although the agriculture community recognizes it has to do its part in reducing the deficit, it does not want to be targeted unfairly.

“Our hope is… that the White House's proposal of cuts would make its way to the ag committees where legislators who are more familiar with what part of the farm program works and what doesn't work (make decisions),” he said.